BRUSSELS, Jan 14 (Reuters) - The European Commission is considering setting a goal to cut EU carbon emissions by 35 or 40 percent by 2030, a target that would mark a watering down of its earlier ambitions following strong industry pressure.

The decision is due to be unveiled on Jan. 22, when the Commission, the EU's executive, will set out its climate and energy policy for the next two decades, updating the 2020 targets that have been the benchmark since 2007.

Once the Commission has laid out its thinking, negotiations will take place with EU member states and the European Parliament, but it could be years before the targets are law.

Ahead of the Jan. 22 announcement, intense discussion has taken place among commissioners and other policymakers.

While some insist that the European Union should set a goal of 40 percent or more, bolstering its position as a global leader on climate policy, others say more realistic targets incorporating industry needs should be set.

Documents reviewed by Reuters show that 35 percent is the dominant figure, with the 40 percent in brackets alongside, meaning it remains a possibility.

"The fight will be to get the 40 percent," said one senior official close to the discussions, suggesting that the current thinking leans towards the lower target.

While heavy industry favours a lower goal, many utilities want a strong carbon target to help drive a shift from coal.

"Green growth and a transition towards a low-carbon economy can only succeed with a greenhouse gas reduction target of a minimum of 40 percent," Johannes Teyssen, CEO of German utility E.ON, told Reuters.

According to EU research, 40 percent is the minimum that carbon in the atmosphere must be cut from 1990 levels to limit global warming to 2 degrees Celsius above pre-industrial levels.

Unless the rise in temperatures is contained, scientists say the planet will suffer more extreme climate events such as floods and droughts.

At the same time, environmentalists say the 40 percent figure is out of date since it assumes that emissions will peak in 2015. That is now not expected to be the case, meaning a larger-than-40-percent cut is required.

RENEWABLE ENERGY

Depending on what level of carbon cut is agreed, the Commission will also indicate the proportion of EU energy that should come from renewable sources, but this is not expected to be binding on individual member states.

If the Commission decides on 35 percent, then the renewables target would be 24.7 percent. A 40 percent carbon target would imply a renewables goal of 27.7 percent. Both of those levels are below the aim of 30 percent muted last year.

Germany, now in the process of transforming its energy mix from nuclear power to renewables such as wind and solar, is adamant that a binding target must be set for each EU state.

But other nations, notably Britain, which is investing in emissions-free nuclear energy, is opposed to another green energy target. Like the utilities, it says it wants just one carbon-cutting goal, which it says should be up to 50 percent.

Poland, which is heavily dependent on coal, is opposed to any agreement on new targets until a global agreement on a successor to the Kyoto Protocol on tackling climate change has been reached. Those discussions will take place next year.

The EU's 2020 targets - which were held up as the gold-standard for the world - called for three goals: 20 percent of energy from renewable sources, a 20 percent cut in emissions versus 1990 and a 20 percent improvement in energy efficiency.

The European Union is expected to meet or exceed the 2020 emissions-cutting and renewable goals, both of which are legally binding.

It is predicted to fall short of the efficiency target, which is not binding, and the Commission says it is too soon to debate a new energy savings goal.

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